India Budget 2015: Is there any hope for rivers, environment or farmers?

Union Finance Minister Arun Jaitley’s Maiden Full year budget presented to the Parliament on Feb 28, 2015 invited a lot of hype. Let us see what his statement of account for the 2015-16 has in store for rivers, environment, Himalayas, farmers, Climate Victims or sustainable water resources development.

If we go by the Finance Minister’s speech alone, there are limited references to these subjects in the speech. Unlike his speech on July 10, 2014, while presenting the Budget for the 2014-15[1], Mr Jaitley’s speech this time[2] avoided controversial references like the ones to Inter linking of rivers, Renuka Dam, River front development, Statue of Unity and so on.

His speech did refer to the government’s Clean Ganga Fund, but he was only referring to tax rebate scheme for contributions to the program: “100% deduction for contributions, other than by way of CSR contributions”.

His budget also had provision of “Rs. 4,173 crore for Water Resources and Namami Gange”.

In agriculture, one significant statement was: “The Pradhanmantri Gram Sinchai Yojana is aimed at irrigating the field of every farmer and improving water use efficiency to provide `Per Drop More Crop’. I am allocating Rs 5,300 crore to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana.” But the scheme announced last year is yet to see implementation, raising doubts how serious the government is.

At Macro level, the Plan Budget of the Government of India is hugely reduced from Rs. 5,75,000 Cr in 2014-15 to Rs. 4,65,277 Cr in 2015-16. Let us see what the Budget, Economic Survey and related documents say on some key issues of our concern.

Ganga: The government has been claiming that they want to rejuvenate Ganga. We have yet to see any credible action on this front. The budget allocates Rs 2100 Cr to Namami Gange (Integrated Ganga Conservation Mission) for 2015-16, slightly up from Rs 2037 Cr allocated in 2014-15 budget. The trouble is the government has no road map for rejuvenating Ganga, except some business as usual urban and industrial effluent control proposals. But such proposals have been going on for 30 years without any impact and the new proposals are likely to meet the same fate since they signify no break from the past. The money for this scheme is coming from clean energy cess, but it is not clear if this is the best use of that money. The clean energy cess fund should not be used for such business as usual projects, but for some significantly people-centered efforts that help those who suffer the impacts of climate change, since such climate change victims are getting no help currently.

The Economic Survey made a strange claim in this regard: “The country has witnessed the introduction of landmark environmental measures for conservation of rivers….” Where are these landmark measures for conservations of rivers?

In this context, let us see the status of the promises made in Budget 2014-15, as given in the Budget document this year. It is clear from these documents that the schemes are still work in progress, meaning far from implementation.

Promise on Namami Gange in Budget 2014-15 “I propose to set up Integrated Ganga Conservation Mission called “Namami Gange” and set aside a sum of Rs 2,037 crores for this purpose.” [Nodal Ministry/Department: Ministry of Water Resources, River Development & Ganga Rejuvenation]

STATUS: Rs 2037 crore has been allocated for this subject. The scheme has been appraised by EFC[3] in its meeting held on 30th December, 2014. Cabinet note is being finalised. Work in progress

Promise of Development of Riverfront “I propose to set aside a sum of Rs 100 crore for Ghat development and beautification of river front at Kedarnath, Haridwar, Kanpur, Varanasi, Allahabad, Patna and Delhi in the current financial year.” [Nodal Ministry/Department: Ministry of Water Resources, River Development & Ganga Rejuvenation]

STATUS The scheme has been appraised by the EFC in its meeting held on 30th December, 2014. Cabinet note is under preparation. Work in progress

MoEF&CC allocation down The FM noted in his budget speech: “Environmental degradation hurts the poor more than others”, and yet the allocation for Union Ministry of Environment, Forests & Climate Change is down 15% to Rs 1681.6 crores in 2015-16 compared with the amount budgeted for the current fiscal year[4].

Leo Saldhana says this is sign of things to come: “Recently following an interaction with senior officials of the Central Pollution Control Board, one of the officers quipped that the budget for the entire CPCB was equal to the cost of a Delhi Metro pillar: Rs. 50 crores. He wasn’t exactly right. Perhaps it’s the cost of two Metro pillars. But we get the point.”

MoWR, RD & GR allocation down The allocation for Union Ministry of Water Resources, River Development and Ganga Rejuvenation is down to Rs 4232.43 crores, comprising of Rs 3607 Cr Planned and Rs 625 Cr non plan Budget. This is down from Rs 13237 Cr Planned and Rs 600 Cr non planned budget for 2014-15, a total reduction of Rs 9630 Cr. Part of this reduction is supposed to be taken care of by the implementation of the 14th Finance Commission recommendations for greater devolution to states, but it is not clear how it can substitute the schemes like the Accelerated Irrigation Benefits Programme or the National Projects Scheme that were granting funds to specific projects.

Farmers get raw deal FM reiterated: “Our commitment to farmers runs deep.” However, the budget does not have a lot to show that commitment. For beginners, Agriculture Ministry’s budget has been reduced by 14.34% compared to the revised estimates. Further, the allocation for the Department of Animal Husbandry, Dairying and Fisheries is reduced by Rs. 683 Cr.

The Economic Survey, rightly expressed concern about non-sustainability of present cropping pattern: “Concerns have been raised for quite some time about non-sustainability of the present cropping pattern and use of water resources. The following initiatives announced in Budget 2014- 15 have brought the issue of sustainability and climate adaptation to the forefront:

Neeranchal, a new programme with an initial outlay of Rs 2142 crore in 2014 to give additional impetus to watershed development in the country,

The National Adaptation Fund for Climate Change, with an initial sum of Rs 100 crore.”

However, the steps the Survey or the Budget has listed are far from sufficient to address non sustainability of water use in agriculture. There is nothing here or elsewhere in the budget to reflect that the government is serious on this, most importantly steps required to discourage water intensive crops like sugarcane, paddy, wheat, among others in water-scarce areas of Punjab, Haryana, Maharashtra and Karnataka. Export of sugar from UP is also tantamount to export of water from Ganga, when government has no road map for Ganga rejuvenation in spite of all the statements and symbolisms that the government has indulged in.

Pradhan Mantri Krishi Sinchai Yojana This new programme of the Modi government under Ministry of Agriculture aimed at ensuring access to water to every farm (Har khet ko pani) has been allocated Rs 5300 crores (a possibility of increasing this by Rs 3000 Cr has been mentioned if FM is able to achieve targeted mobilization) including allocation for watershed programme and Rs 1800 crores for the micro irrigation. As against that, the allocation for Rashtriya Krishi Vikas Yojana has seen a huge cut from Rs 9954 crores Budget allocation in 2014-15 to Rs 4500 crores in 2015-16.

However, this PMKSY scheme was floated in Budget 2014-15, the scheme is far from beginning implementation, as is clear from Budget documents:

Promise in Budget 2014-15: “I propose to set aside a sum of Rs 1,000 crore for this purpose.” [Nodal Ministry/Department: Department of Agriculture & Cooperation]

STATUS: Concept Note, Expenditure Finance Committee (EFC) Note and draft Guidelines of PMKSY have been circulated to all concerned Ministries/Departments. Work in progress

Another noteworthy scheme of the NDA government, namely Neeranchal or watershed development is also yet to reach implementation stage:

Promise in Budget 2014-15: “To give an added impetus to watershed development in the country, I propose to start a new programme called “Neeranchal” with an initial outlay of Rs 2,142 crores in the current financial year.” [Nodal Ministry/Department: Department of Land Resources]

STATUS: A Cabinet Note seeking approval of Cabinet has been submitted on 29.10.2014. Work in progress

Failure of Big Irrigation Projects The Economic Survey notes, “Under the AIBP, Rs 67,195.47 Cr of central loan assistance (CLA)/grant has been released up to 31 December 2014. An irrigation potential of 85.03 lakh ha is reported to have been created under the AIBP by states from major / medium /minor irrigation projects till March 2013.” But the survey may well have compared this claim of irrigation potential created with actual irrigation figures and it would have realized how hollow these claims are. It is this uncritical acceptance of such claims that is leading to scams like the Maharashtra Irrigation Scam. In spite of CAG reports repeatedly warning about such scams in other states including Andhra Pradesh, Orissa, Madhya Pradesh and Gujarat, there is no reality check. Economic Survey itself notes that there is no reduction in gap between the Gross Cropped Area and Gross Irrigated Area since the first Five Year Plan, see the graph from Economic Survey.

Gap between gross cropped area and gross irrigated area has not reduced since the first Five Year Plan [Source: Economic Survey, February 27, 2015

Organic Farming A new scheme called Paramparagat Krishi Vikas Yojana for organic farming launched by the agriculture ministry has been allocated Rs 300 Cr.

However, the promise of Organic Food scheme announced last year is to be implemented as can be seen from the status given in the Budget document this year.

Promise in Budget 2014-15 – North Eastern States Organic Food “To facilitate this, I propose to provide a sum of Rs 100 crore for this purpose in the current financial year.” [Nodal Ministry/Department: Ministry of Development of North Eastern Region]

STATUS: Draft EFC/SFC Memo along with Concept Note for implementation of the scheme is being finalized. Work in progress

Renewable Energy The Economic survey said: “Supplementary guidelines were issued under the existing ‘Solar Pumping Programme for Irrigation and Drinking Water’ scheme to solarize the targeted one lakh such pumps throughout the country during the current year.” Promoting solar pumps is fine, but guidelines should be clear that new pumps should not come up in groundwater deficit areas and if at all, new solar pumps should genuinely replace the conventional pumps and not add to the groundwater overdraft.

Hydro Generation down It is good to see that the Economic Survey acknowledges hydro generation is down: “The negative growth in hydro generation in 2014-15 (Apr Dec 2014-15 period has seen decrease in generation from hydropower projects by 3.64% compared to same period in 2013-14) is mainly due to poor monsoon.” However, the hydro generation this year is less than that last year in spite of increased installed capacity, not only because of poor monsoon, but also for a number of other reasons including lack of proper maintenance, siltation, accidents, optimistic assumptions and over-development. If there is a credible analysis of what is going on in this sector over the last two decades, the reality would come to light. It is high time such a commission is set up.

Clean Energy Cess One interesting announcement related to environment in the speech was about coal cess: “The effective rate of Clean Energy Cess is being increased from Rs 100 per tonne to Rs 200 per tonne.” The Economic Survey estimates estimates that the cess on coal of Rs 100 a tonne is equivalent to a carbon tax of $1 a tonne of CO2.[5]

Urbanisation threatens water flare ups The Economic Survey aptly warns: “India is at the threshold of an urban flare-up. The population of Indian cities will increase from 340 million in 2008 to 590 million by 2030… As population increases, demand for every key service will increase five to sevenfold. These trends, combined with the current challenges of poverty eradication, food and energy security, urban waste management, and water scarcity, will put further pressure on our limited resources…”

Another statement in Economic Survey is noteworthy: “A large fraction of subsidies allocated to water utilities are spent on subsidising private taps when 60 percent of poor households get their water from public taps.”

But there is no solution to this dichotomy in the Survey, Budget or the government. The Government is pushing for more Big Dams and river linking projects for urban areas, rather than going for rain water harvesting, sewage treatment and recycle and demand side measurements.

Here let us see the status of key promise made in the last budget, the budget document shows that the promise is still at discussion stage.

Promise of Urban Renewal in Budget 2014-15 “While developing housing and other infrastructure, both physical and economic, which can have local variations, four fundamental activities must underpin such development. These are provision of safe drinking water and sewerage management, use of recycled water for growing organic fruits and vegetable, solid waste management and digital connectivity. It is the vision of this Government that at least five hundred (500) such habitations must be provided support, while harnessing private capital and expertise through PPPs, to renew their infrastructure and services in the next ten years.” [Nodal Ministry/Department: Ministry of Urban Development]

STATUS: EFC Note is being finalized for obtaining comments of the concerned Ministries/Departments. Work in progress

Climate Action Plan: Missions being redesigned? The Economic Survey gave this news: “India is now… redesigning the National Water Mission and National Mission on Sustainable Agriculture.” This is welcome provided the reformulation happens in transparent and consultative way, involving the gram sabhas.

The Survey gave another bit of interesting news: “NABARD has sanctioned a pilot project of Rs 21 crore on climate change adaptation in Maharashtra to develop knowledge, strategies, and approaches that will enable vulnerable communities to adapt to the impending impacts of climate change.” The Maharashtra farmers indeed need such a project, the way they have faced the climate induced droughts, hailstorms and unseasonal rains, but there is no information what is the status of this pilot project. As we noted earlier, the State Action Plan on Climate Change being done by TERI is yet to be finalised.

Status of 2014-15 Budget promises exposes the government Among the Budget documents, there is an interesting document[6] that provides the status now of the promises made in the previous, that is 2014-15 Budget. Let us see the status of some key promises from our perspective, status of some others have already been given above. What we can see these is that in most cases, the Promise is yet to be realized.

PROMISE: “The Prime Minister has a vision of developing ‘one hundred Smart Cities’, as satellite towns of larger cities and by modernizing the existing mid-sized cities. To provide the necessary focus to this critical activity, I have provided a sum of Rs 7,060 crore in the current fiscal.” [Nodal Ministry/Department: Ministry of Urban Development]

STATUS: The Concept Note on Contours of Smart City Scheme after consultations with all the stakeholders was revised on 03.12.2014. The document was uploaded on the website (www.indiansmartcities.in) for inviting further comments before it is finalized. Work in progress

Promise on Agriculture and Climate Change “Climate change is a reality which all of us have to face together. Agriculture as an activity is most prone to the vagaries of climate change. To meet this challenge, I propose to establish a “National Adaptation Fund” for climate change. As an initial sum an amount of Rs 100 crore will be transferred to the Fund.” [Nodal Ministry/Department: Ministry of Environment & Forests & Climate Change, Department of Agricultural Research & Education]

STATUS: Draft EFC Memo for “National Adaption Fund” has been circulated. SFC proposal for NAF for Climate Risk in Agriculture amounting to ` 100 crore has been formulated and is in advanced stage of processing. Work in progress

[Post Script: As per a subsequent Mint report on March 5, 2015 (see: http://www.livemint.com/Politics/S0ZxZxDjCIeuvtb4Um2CRL/Climate-fund-plan-awaits-clearance.html), MoEF&CC has sent a Rs 150 Cr proposal for a Central Sector Scheme to Finance Ministry, but the Finance Ministry has yet to clear it. It says the fund was proposed last year but wasn’t launched “on account of the government’s focus on reducing expenditure”.]

Conservation of Himalayas “There is a great need to increase the capacity in the country for Himalayan Studies. I propose to set up a National Centre for Himalayan Studies in Uttarakhand with an initial outlay of Rs 100 crore.” [Nodal Ministry/Department: Ministry of Environment, Forests & Climate Change]

STATUS: The SFC meeting is awaited. Work in progress

Here it needs to be noted that there are already a number of existing institutes in Uttarakhand. For example, there is the Wadia Institute of Himalayan Geology, a Centre For Glaciology (also under Wadia Institute), G B Pant Institute of Himalayan Environment and Development (Almora), Forest Research Institute (Dehradun), Wildlife Institute of India (Dehradun), among others. If the idea is to study Mountain Meteorology, than that task can also be given to Regional Meteorology Centre at Dehradun under IMD. The existing institutes can also be asked to include climate change perspective in their work. Unless there is clarity as to what this new institute will achieve, different from what existing institutes are doing, it is difficult to understand what will be achieved with this new proposed institute.

Welcome words, Mr. PM, but actions? Prime Minister Shri Narendra Modi said in Parliament on Feb 27, 2015, in reply to the President address to the Joint Session of Parliament: “एक तरफ हम किसान की बात बहुत करते हैं लेकिन किसान को मुसीबतों से बाहर निकालने के लिए हम कोई रास्ते खोजेंगे कि नहीं खोजेंगे? कई उपाय हैं। जैसे हम एक काम लेकर के निकले हैं Per drop-more Crop। हमारे देश में पानी की कमी है, सारी दुनिया पानी की कमी से जूझने वाली है। क्या सरकारों की जिम्मेवारी नहीं है कि आने वाले 30-40 सालों में भविष्य को देखकर के कुछ बातों को करें, कि हम तात्कालिक लाभ के लिए ही करेंगे? हो सकता है राजनीतिक लाभ हो जाएगा लेकिन राष्ट्रनीति- उस तराजू में वो बात बैठेगी नहीं। ” (English translation: “On the one hand we talk a lot in the name of farmers, but will we find some ways for solving farmers problem or not? There are many ways. For example, we have started work on Per Drop More Crop. There is water scarcity in our country; whole world is going to face water scarcity. Is it not responsibility of the governments we do things keeping in mind the 30-40 year future, or will we work only for immediate profits? May be you will get political benefit that way, but that cannot fit into the scheme of national policy.”)

Prime Minister’s statement, coming a day before the Budget is significant and welcome. But where is the action, in the budget that sees water use in longer term and farmer oriented perspective? In fact the Modi cabinet decided in the week of Budget, to continue with the subsidy at the rate of Rs 4 per kg for export of 1.4 million ton of raw sugar. That subsidy of whopping Rs 560 crores is actually subsidy for export of water from drought prone area (when the exported sugar comes from Maharashtra or Karnataka) or from Ganga basin (when it comes from Uttar Pradesh) or at the cost of groundwater mining (when it comes from Punjab and Haryana). Same is the case with paddy/ rice & wheat export from Punjab and Haryana. Even if this is argued as necessary in immediate prevailing situation, where is the long term plan to get out of this situation?

It is clear that the budget 2015-16 is not inspiring confidence that any action keeping the long term interests of farmers, water resources, rivers, Himalayas, Climate Victims or environment is on the horizon.